With any measurement it’s always good to have benchmarks along the way. I check on my net worth once a quarter, with a mid year and annual review. For 2014 our goals is to achieve a $250,000 net worth increase. $250,000 is more than our combined household income earned from our salaries, bonuses, profit sharing, dividends, side hustle and real estate income. This accounts for market gains. To achieve our goal we’re doing the following:
Live on one income and 100% invest the other
Maximize all retirement account contributions
Reinvest all dividends, rental income, and tax windfall (earned from our solar rebate)
Invest 100% any side hustle money I earn
Real Estate +$17,915
This is the equity gained from paying down our mortgages in my primary house and rental units. I don’t calculate any property value changes in this number. Once a year in December I calculate the changes in property values based on neighborhood comps, tax assessment and Zillow. Considering Hawaii properties are expected to rise 7% this year with the median house topping $700,000 and condo at $350,000 the fourth quarter should show some nice gains.
This is across all 401K and taxable accounts, includes appreciation and contributions. I invested my $15,000 solar tax return in a bond fund, I also received $35,000 from a business venture. Used that money to invest in stocks. In the first quarter I received my bonus and profit sharing which was then invested into the market.
In dividends I have received $8,777.13 so far this year. The bulk of my investments are in retirement accounts which pay out their dividends in the fourth quarter. Last year in the fourth quarter I received $10,140.53, looking forward to that again.
Business Venture -$35,000
Cashed out on a business investment and invested the proceeds into the stock market.
The first half was quite expensive, spent $13,000 on a family emergency. Also went on a fancy Boston vacation and spent quite a bit. Received $50,000 from a tax refund and business venture and invested that into the market.
Total Net Worth Gain +$127,901
I’m at 51% of my 2014 goal. The problem is I got there with a $50,000 windfall, my profit sharing and bonus in the first half. In October my wife will hit her 2014 contribution limits in her 401K and I’ll hit mine in November, so we’ll be going from pre tax dollars to post tax dollars which will lower my contribution rate. We also have a couple of vacations lined up that will be an added expense.
I didn’t want to but it looks like I’m going have to rely on the market gains in both stocks and real estate to achieve my 2014 goals. We’ll look at controlling more of our expenses, I’ll look at increasing some of my side hustle income. In January our $35,000 solar loan comes due so we’ll already be in the hole for 2015. I’ll have a final update at the end of the year.
How are your first half goals? Will you achieve what you set out in January?
Side hustle photo image credit: college investor.com